Realty cos find low-cost housing lucrative: Assocham

PTIMay 25, 2009, 09.24pm IST

NEW DELHI: Real estate companies are eyeing innovative and affordable housing projects due to increasing demand and huge potential of the segment, especially in times of economic slowdown, industry body Assocham today.

"Despite global financial crisis penetrating Indian markets leading to high credit crunch and hitching real estate players to slow down their investment plans, the sector was able to attract (the) highest investments with RBI's timely stimulus packages and the concept of low-affordable housing," Assocham President Sajjan Jindal said.

In the last four months of 2008-09, affordable housing projects constituted 12.7 per cent share amounting to Rs 35,850 crore in the total planned capex for realty sector, it said.

However, with the commencement of FY' 09, realty firms announced huge investment projects in the sector. In May 2008, total planned amount stood at Rs 90,219 crore due to credit crunch and high interest rates, the planned investment dipped in November 2008 to Rs 905 crore, Assocham said.

Among the states, which attracted domestic investment in the realty sector in the last fiscal were Gujarat, Haryana and Rajasthan, the survey said.

India has a housing shortage of about 19.4 million units, Assocham said.

The government's two stimulus packages announced in December and January brought relief to the firms and also to related sectors as steel, cement, construction, wood and wood products, tiles and ceramics, which were affected due to demand slow down in housing, it said.

The fiscal measures created demand for lower income group (LIG) and middle income group (MIG), particularly in non-metros, it said.

Builders are also pitching in new and unique features to make their property more attractive.